Winnipeg Real Estate News
Rent controls - the bogeyman of politicians.
But Mayor Glen Murray hasn't been scared off. He told the Winnipeg Real Estate Board at its annual election meeting last week that it's time to find a replacement for rent controls.
Murray said the simple fact is that rent controls have put a damper on multi-dwelling rental unit construction.
Earlier, Bob Shaer, the president of the Professional Property Management Association, told the WREN that in the last decade there has not been a single rental apartment building under construction.
Murray said it's time to re-invest in multi-dwelling rental buildings, adding that rent controls have been around for long enough to have fulfilled their original purpose of providing adequate protection for low-income people.
The mayor said the present rent control regime, though it has been increased from one per cent to 1.5 per cent this year, is a disincentive to investment and tends to ghettoize people. As rent-controlled properties become less profitable, a landlord is reluctant, to put in costly repairs. In some cases, a landlord either converts the property into a more profitable use or lets it deteriorate and become uninhabitable.
"You've got to create a market for apartment investment," commented Murray. "Winnipeg has to be more than Christmas lights and Blue Bomber kick-off parties."
Though the mayor didn't offer a solution to rent controls other than saying the regime has to be changed, Shaer said what is required is a little give and take between the provincial government and the private sector.
"We're asking the government for a rate that is the same as the published Consumer Price Index," he said. "There will also have to be an allowable catch-up period for the next two or three years to bring units to the CPI".
The CPI has gone up 13 per cent from 1992 to 1998, but allowable rent has increased by only six per cent during the same period.
The PPMA is also proposing that when a rental unit is voluntarily vacated by a tenant that the unit be rented without rent controls, allowing the competitive environment of the marketplace to set the rental rate. And once rented at the competitive rate, it will once again be subject to rent controls.
The PPMA is also presenting to the prov4nce a proposal that all new private rental construction be exempt from the Rent Control Act. At present, the exemption rate is five years.
Rent controls were introduced by the provincial NDP government three decades ago "as a vital part of the strategy for dealing with the pending rental market crisis," said then housing minister Eugene Kostyra.
The present NDP government recognizes there are probiems associated with rent controls and is studying the PPMA proposals.